The Company’s internal control and audit system is based on the principles of a risk-based approach and includes the following regular processes:
- Identifying, assessing, and monitoring risks that may have a significant impact on the Company’s operations
- Developing, implementing, and enhancing the Company’s internal control procedures to manage the above risks
- Internal auditing of the efficiency of the internal control system
The project to centralise the Company’s internal audit functions was completed in 2016. The project was aimed at increasing the efficiency and ensuring the independence of the internal audit process.
The internal audit system covers all management levels of the Company and comprises:
- the Audit Committee of the Board of Directors
- the Internal Audit Department and its regional branches located at the Company’s business units’ sites
Metalloinvest’s internal audit system
The key objective of the internal audit is to perform an independent assessment of control procedures, risk management, and corporate governance to ensure:
- strong financial and business performance of the Company
- protection of the Company’s assets from illegal actions of both employees and third parties
- compliance of the Company’s operations with internal regulations, statutory requirements, and contractual obligations
- fair representation of the Company’s financial and business performance in management reports and financial statements
The goals, objectives, and principles of the internal audit system function are defined in the Regulations on the Internal Audit.
Following the audits, recommendations are developed to enhance control systems and mitigate the negative impact of the identified risks. The compliance with the recommendations is monitored regularly.
Twice a year, the Audit Committee reviews the consolidated report on the completed internal audits, identified issues and measures taken by the executive management team to comply with the recommendations of the internal audit.
The priority audit areas are determined in line with the riskbased approach, while taking into account the Company’s goals, the Board of Directors’ instructions, and proposals of the Company’s executive management team and business units.
In the reporting year, audits of process areas associated with the most significant risks were held, including:
- operational efficiency management
- procurement and supply chain management
- investment projects management
The Board of Directors puts a strong emphasis on the internal control and audit system and works to ensure its effective performance and compliance with global best practices.